President Biden on Tuesday announced a plan to release oil from the Strategic Petroleum Reserve (SPR), in coordination with other countries, as part of efforts to tamp down high gas prices facing American consumers with the busy Thanksgiving holiday and travel season beginning.
The Department of Energy will release 50 million barrels of oil from the SPR, of which 32 million will be an exchange of oil that will be returned in the years ahead, and 18 million will be the acceleration of a sale of oil previously authorized by Congress.
The move is part of a coordinated effort with major energy-consuming nations including China, India, Japan, South Korea and the United Kingdom to release reserves of crude oil. The White House said the agreement is the culmination of weeks of talks with other nations as part of Mr. Biden’s efforts to address the lack of oil supply stemming from the COVID-19 pandemic.
“Today’s announcement reflects the president’s commitment to do everything in his power to bring down costs for the American people and continue our strong economic recovery,” the White House said in announcing the release.
Mr. Biden “stands ready to take additional action” if it is needed, the White House said, and “is prepared to use his full authorities working in coordination with the rest of the world to maintain adequate supply as we exit the pandemic.”
If successful, the move would pit the countries against the OPEC coalition — including Russia and Saudi Arabia — for control over oil prices.
White House press secretary Jen Psaki said Monday that the White House will continue to press OPEC and oil and gas companies to lower prices.
“We have been having conversations with a range of countries about the importance of, of making sure that the supply out there meets the demands and helps meet, prevent an imperiling of the global economic recovery,” Psaki said.
The announcement came ahead of remarks Mr. Biden is scheduled to deliver Tuesday afternoon on “the economy and lowering prices for the American people.”
The SPR is a large supply of oil along the Texas and Louisiana coasts that the U.S. keeps for emergencies. The SPR is a sort of emergency fund for gasoline, intended to be tapped only to address a disruption in the oil supply, such as after natural disasters, but it hasn’t been used to control oil prices. Releasing oil from the SPR might lower prices in the short term, but its impact could be limited.
“The devil would be in the details,” said Patrick DeHaan, head of petroleum analysis at GasBuddy, on Monday. “The president … has to make sure it’s enough to move the needle but not so much as to deplete the SPR.”
Fin Gomez, Irina Ivanova and Melissa Quinn contributed to this report.
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